VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 22
Automobile sales surge in October
Sales of automobiles by members of the Vietnam Automobile Manufacturers’ Association (VAMA) in October surged 22 percent against the previous month to reach 33,254 units.
The association said the figure almost caught up with the record sales of 33,484 units posted in January 2019.
Sales of passenger cars expanded 23 percent to 25,339 units and commercial vehicles, up 17 percent to 7,528 units. Meanwhile, 387 special-use vehicles were sold, up 71 percent month-on-month.
September sales included 20,498 locally-assembled vehicles, up 15 percent, and 12,756 imported vehicles, up 35 percent.
Among non-VAMA members, TC Motor reported sales of 7,839 automobiles in October, while VinFast sold 2,866 units.
The combined sales of VAMA members, TC Motor, and VinFast reached 43,959 in October.
For the 10-month period, a total of 212,409 vehicles were sold, a drop of 18 percent year-on-year.
Toyota was the best selling brand in the past month with 8,841 units sold, followed by TC Motor with 7,839 units, and Kia with 4,685.
Experts explained that the domestic automobile market has bounced back as the COVID-19 pandemic has been contained in Vietnam and businesses have offered an array of promotion programmes.
However, they said, it is hard to raise this year’s sales to 400,000 units as recorded last year since the average monthly sales stood at only 21,000 units per month during the January-October period, as compared with 33,000 units last year./.
FDI inflow in real estate rises four times in Q3
New foreign direct investment (FDI) in the real estate sector increased four times quarter-on-quarter to 2.35 billion USD in the third quarter, according to statistics of the Ministry of Planning and Investment.
The FDI inflow in the sector in the first three quarters of this year added to 3.2 billion USD, accounting for 15 percent of the total figure.
The Construction Ministry said despite the double impact by the return of the COVID-19 pandemic in July and the low season in the seventh lunar month which is considered a “bad luck” period, the surge in FDI in the sector is a positive signal.
According to the ministry, most businesses in the real estate sector have resumed operation after two waves of COVID-19. They have taken measures to approach customers, and even look to new areas to anticipate the shift in the FDI flow and the trend of urbanization outside major cities./.
Conference seeks to boost SOEs’ digital transformation
State-owned enterprises (SOEs) must push up digital transformation to improve their competitiveness and operation efficency, Chairman of the Committee for Management of State Capital at Enterprises (CMSC) Nguyen Hoang Anh said.
He was speaking at a conference on November 18 about building e-Government and digital transformation at enterprises that SOEs must be pioneers in digital transformation, adding that in the era of Industry 4.0, digital transformation was an inevitable trend that every country in the world was aiming for and Vietnam was no exception.
2020 was the starting year for the national digital transformation following the Prime Minister’s Decision No 749/QĐ-TTg about the national digital transformation programme to 2025 with a vision to 2030.
Anh stressed that digital transformation was not only a task but also a solution for SOEs to improve their operation efficiency.
“SOEs must be pioneers in digital transfomation to increase their competitiveness and operation efficiency, and contribution to the prevention and fight against the COVID-19 pandemic,” he said.
Nineteen SOEs under CMSC’s management were playing a significant role in the national digital transformation process, given that they were holding significant resources of the country’s economy.
CMSC’s Deputy Chairman Nguyen Ngoc Canh urged SOEs to speed up the digital transformation process to play a leading role in developing a digital economy.
He said technology enterprises under CMSC’s management must be responsible for implementing digital transformation for the Government, local authorities and other enterprises.
Determination and drastic measures must be taken to speed up the digital transformation, Canh said. “Who comes first will win,” he stressed.
He said SOEs needed to prepare in terms of digital infrastructure, developing digital-based solutions and products as well as building talents and enhancing capacity.
Besides, focus should also be placed on ensuring network security in digital transformation.
Chairman of the Vietnam Posts and Telecommunications Group (VNPT) Pham Duc Long said Vietnam’s digital economy saw significant development in recent years. However, the development remained uneven among different economic sectors and different regions, Long said.
Long said VNPT would continue efforts to become the leading partner of the Government in developing e-Government as well as the leading company in Vietnam to master Industry 4.0 to solve pressing issues of the country and provide comprehensive digital-based solutions.
On the same day, CMSC officially launched a document linking axis developed by VNPT which would be connected with the national document linking axis, helping save time and costs in handling administrative documents./.
Vinh Phuc sees RoK investors as key: Official
Vinh Phuc province views localities and businesses in the Republic of Korea (RoK) as its partners of top importance and a key factor in its international integration strategy, Hoang Thi Thuy Lan, Secretary of the Vinh Phuc Party Committee, has said.
Speaking at a conference entitled “Vinh Phuc - Safe and Promising Investment Destination” on November 18, Lan said the province has enjoyed long-standing relations and cooperation with Chungcheonbuk province in the RoK.
It hopes to expand its relationships with other RoK localities, which are a potential source of investment, especially in building infrastructure for industrial parks, manufacturing and processing, high-tech application, energy saving measures, support industries, and electronic accessories production, she said.
The provincial leader said that despite the impact of COVID-19, the northern province has maintained the pace of its economic growth, with FDI increasing strongly in recent times.
RoK businesses have expressed interest in investment policies in Vietnam and Vinh Phuc, as well as sectors where Vinh Phuc has demand and clear land reserves for foreign investors.
According to Deputy Minister of Planning and Investment Tran Duy Dong, Vinh Phuc holds advantages in possessing road, railway, and waterway networks, being located near Hanoi’s Noi Bai International Airport, and lying on the Kunming - Lao Cai - Hanoi - Quang Ninh economic corridor, which are favourable for the formation of a northern industrial belt.
Meanwhile, Le Duy Thanh, Chairman of the People’s Committee of Vinh Phuc, said the locality hopes to welcome more RoK investors, especially those with competitive high-tech products.
Vinh Phuc has all the conditions necessary to welcome major enterprises, he said, and pledged it will create optimal conditions for and provide support to investors.
An MoU was also signed between the Korea Chamber of Commerce and Industry and the Vinh Phuc Department of Planning and Investment, along with another between the department and the Vietnam Commercial Bank for Foreign Trade (Vietcombank)./.
Corporate bond market cools for 2nd month
The value of corporate bonds issued in October was VND9.5 trillion (US$409 million), down 12.8 per cent from September, according to the Ha Noi Stock Exchange (HNX).
Compared to August, the figure was down 84 per cent.
Creditors remained the biggest issuers as the value of their sold bonds was VND3.7 trillion, accounting for nearly 39 per cent of the total figure.
Real estate firms ranked second with VND3.07 trillion worth of corporate bonds sold to investors in September, which accounted for 32.3 per cent of the total.
Services and construction companies issued VND226 billion and VND300 billion worth of bonds in September, respectively.
Their figures accounted for 2.4 per cent and 3.2 per cent of the market’s total, respectively.
In October, 20 companies organised 90 bond auctions. The average term of the bonds was 5.47 years.
Bonds sold by lenders had the highest average annual yield rate of 6.08 per cent, followed by construction companies (5.33 per cent), property developers (4.61 per cent), and services suppliers (2.69 per cent).
The northern market regulator said that the market continued cooling down in October since Decree 81/2020/ND-CP took effect on September 1 to tighten the corporate bond market in order to protect investors that are vulnerable to risks and make the market more transparent.
Realty bonds as bad debts
According to the HCM City Real Estate Association (HoREA), outstanding loans for real estate companies in HCM City increased by 5.9 per cent in 10 months to VND293.8 trillion in October.
The figure was equal to 12 per cent of the total outstanding loans for all sectors in the southern hub city, which rose 5.5 per cent in 10 months to VND2.42 quadrillion in October.
About 2.7 per cent of outstanding loans for real estate projects were considered bad debts, according to HoREA.
The Vietnamese economy continued progressing in the first nine months at a pace of 2.12 per cent, inflation was controlled well and the consumer price index (CPI) rose only 3.71 per cent.
Those factors mean the bad-debt ratio in the real estate sector remains under control, HoREA said.
“But a large amount of loans made to real estate firms, including bond purchases by both institutional and individual investors, may turn to non-performing loans,” the association warned.
The regulators should pay attention to consumer lending, especially when some people borrow money to buy properties instead of building and repairing their houses as contracted, HoREA said.
Those loans may account for 1.7 per cent of the total real estate loans and such loans require stricter supervision from the authorities, the association added.
Property developers made big bond issuances in January-August but the sector cooled down in September and October due to Decree 81/2020/ND-CP.
It should be noted that the number of individual investors accounts for 20 per cent of all investors while bond purchases by banking institutions occupy a majority of the total figure, HoREA said.
Those underline potential risks for investors, issuers and financial companies when the bonds come to maturity, the association said.
There needs to be an independent rating agency to evaluate the bond issuers, thus making the market more transparent and better protecting the investors, HoREA said.
Vietnamese computer imports exceed US$51 billion over 10-month period
Vietnam spent approximately US$210.3 billion on imports during the 10 months of the year, representing an annual increase of 0.3% with computers and electronic products becoming the group with the largest import turnover of up to US$51.27 billion, according to the General Department of Vietnam Customs.
Electronic components, raw materials for textiles, along with the footwear and machinery sectors are among the groups that recorded the largest import turnover throughout the reviewed period.
The Republic of Korea (RoK) continued to make up the country’s largest import market with turnover of US$14.1 billion, followed by China with US$14.09 billion, and Taiwan (China) with US$6.3 billion.
With regard to global markets, Asia countries dominate other markets in terms of providing goods to the nation. Indeed, they make up 80.4% of total Vietnamese import turnover, with China and the RoK representing the biggest suppliers of goods to the country.
Most notably, the nation spent US$65.62 billion on importing goods from the Chinese market, representing an annual increase of 5.9% and accounting for 31.2% of total Vietnamese import turnover.
Elsewhere, other major markets such as the RoK, ASEAN, and Japan witnessed import turnover reach US$37.47 billion, US$24.5 billion, and US$16.55 billion, respectively.
Furthermore, the Americas, Europe, Oceania, and Africa also saw import turnover hit US$18.13 billion, US$15.59 billion, US$4.33 billion, and US$3.07 billion, respectively, during the course of the reviewed period.
Among the four continents, only Europe enjoyed positive growth with 3.3%, while each of the remaining continents endured a spell of negative growth.
Seafood exports fail to meet this year's export target of US$10 billion
Due to the adverse impacts caused by the COVID-19 pandemic, the nation’s seafood exports for the entire year are anticipated to reach approximately US$8.2 billion, thereby failing to meet the export target of US$10 billion, according to the Agro Processing and Market Development Authority (Agrotrade).
Throughout the initial 10 months of the year, the export value of seafood dropped by 2.5% to approximately US$6.88 billion against the same period last year.
Most notably, the United States, Japan, China, and the Republic of Korea (RoK) remained as the leading four importers of Vietnamese seafood throughout the reviewed period. Indeed, export value to the US market saw a boost of 8.5%, along with a 0.1% rise to China, while export value to Japan and the RoK declined by 3.2% and 1.2%, respectively.
Furthermore, the price of raw pangasius in the Mekong Delta provinces in October witnessed a sharp recovery, hovering between VND21,000 and VND22,000 per kilo, an increase of VND4,000 per kilo.
Nguyen Quoc Toan, director of Agrotrade, said the nation’s shrimp industry has shown signs of recovery in the remaining months of the year, with import demand for pangasius in major markets starting to bounce back after a period of being negatively affected by the impact of COVID-19.
Ministry of Agriculture and Rural Development representatives underscored the importance of implementing a range of urgent measures in an effort to lift the EU’s yellow card placed on Vietnamese seafood in order to maximise the benefits brought about by the EU-Vietnam Free Trade Agreement (EVFTA).
According to experts, in addition to removing the EU’s yellow card, local seafood firms have been advised to continue closely collaborating with state management agencies to strictly implement regulations on combating illegal, unreported, and unregulated (IUU) fishing.
FDI businesses enjoy US$29 bln export surplus despite COVID-19
Foreign direct investment (FDI) businesses have made a significant contribution to Vietnam’s trade balance during the past 10 months as they obtained an export trade surplus of US$28.92 billion despite the impact of the COVID-19 pandemic.
According to the General Department of Vietnam Customs, Vietnam’s import-export value rose 2.7% to US$440 billion in 10 months compared to the same period last year. Businesses earned US$229.79 billion from exports and spent US$210.3 billion on imports, securing a trade surplus of US$19.5 billion.
Notably, three groups of hard currency earners, namely computers & electronic components, machinery & spare parts, and woodwork raked in US$36.4 billion, US$21 billion and US$10 billion, respectively, representing corresponding increases of 25%, 43.3% and nearly 12%.
In contrast, exports of other key products such as garments, footwear and mobile phones fell year on year by more than 9%, nearly 9%, and more than 4% respectively.
Meanwhile, the import value of raw materials and accessories for garments & leather shoes decreased by 13.5% over the same period, and machinery and equipment down by 0.6%.
The General Department of Vietnam Customs noted a large disparity between FDI businesses and domestic firms.
The import and export value of FDI businesses over 10 months reached US$295.86 billion, an increase of US$20.49 billion or 7.4% over the same period of 2019.
Of the total, they bagged US$162.39 billion from exports and spent US$133.47 billion on imports, thereby enjoying a trade surplus of US$28.92 billion.
Regarding the export market, Asia is Vietnam’s trade partner, making up 64.2%) of the country’s total trade in the reviewed period. Statistics show the 10-month import-export value to this market reached US$282.49 billion, up 0.8%, of which exports brought back US$113.31 billion.
The US was Vietnam’s largest export market, accounting for more than 27% of total export turnover. Key export items were machinery, equipment and spare parts, electronic products, mobile phones, computers, garments, footwear, wood and wood products.
IMF upbeat about Vietnam’s economic growth
Vietnam’s economy is set to grow by 2.4% this year due to the implementation of swift fiscal and monetary policies, along with decisive steps aimed at containing the health and economic fallout from the COVID-19 pandemic, according to the International Monetary Fund (IMF).
“A strong recovery is expected in 2021. Growth is projected to strengthen further to 6.5% as normalisation of domestic and foreign economic activity continues,” says Era Dabla-Norris, mission chief to Vietnam and division chief in the IMF’s Asia and Pacific department.
Dabala-Norris notes that the country’s fiscal and monetary policies moving forward are expected to remain supportive, although to a lesser extent than in 2020.
Most notably, the nation’s fiscal response has largely been focused on supporting vulnerable households and firms in need, says Dabla-Norris.
Monetary policy easing and temporary financial relief measures put forward by the State Bank of Vietnam (SBV) have served to alleviate liquidity pressure, lower the cost of funding, and has ultimately facilitated a continued flow of credit, she adds.
The anticipated growth of the Vietnamese economy comes after it expanded by 7% last year, according to IMF data.
Vietnam underscores importance of FTAs to ASEAN-EU relations
The initial successes of the implementation of high-quality free trade agreements (FTAs) between the EU and ASEAN member states, such as the FTA between the EU and Vietnam, along with the FTA between the EU and Singapore, will provide a solid foundation towards one day having an FTA between ASEAN and the EU.
These remarks were made by Minister of Industry and Trade Tran Tuan Anh during the eighth edition of the ASEAN-EU Business Summit that is running with the theme of “Towards an inclusive, resilient and stronger ASEAN” which was held via an online platform on November 19 in Singapore.
The occasion saw the participation of more than 250 delegates, including policy makers and business leaders from both Europe and Southeast Asia.
Some of the major issues under discussion at the meeting were focused on promoting digital economic development and transformation, e-commerce, and searching for ways to ensure a sustainable health care system that can be provided at a suitable cost for people in the ASEAN region. In addition, opportunities that exist for European businesses amid ASEAN’s economic recovery process following the novel coronavirus (COVID-19) pandemic were also mentioned.
During his speech, Singaporean Industry and Trade Minister Chan Chun Sing reaffirmed that both sides can be connected by digital platforms and standards, and should not be divided based on the issue of geographical distance.
Moving forward, there are now greater opportunities for like-minded countries to co-ordinate and establish high-standard regulations aimed at addressing digital trade-related issues, the Singaporean Minister said. Indeed, a digital economy agreement (DEA) will be a major step to achieve digital connectivity between the two sides.
In his speech, Vietnamese Minister of Industry and Trade Tran Tuan Anh stated that the EU represents ASEAN's second largest trading partner throughout the 2009 to 2018 period, as well as being ASEAN's largest investor with total direct investment capital of US$190 billion.
Minister Anh also expressed optimism regarding the future of the ASEAN-EU relationship, thereby encouraging the two blocs to take full advantage of potential opportunities moving past the COVID-19 pandemic that could establish resilience and economic prosperity.
Citing the EU-Vietnam free trade agreement (EVFTA), Minister Anh said that these high-quality FTAs serve to have a positive impact on the Vietnamese economy, along with helping to improve the governance processes, along with moving the Vietnamese legal system towards greater transparency and openness.
According to the Vietnamese Minister, both sides should continue to accelerate a range of economic and trade co-operation activities at bilateral and regional levels with a particular focus on urgent issues for the business community, including supply chain connectivity and non-tariff barriers.
ASEAN and the EU are also in the process of exchanging ideas to speed up the resumption of FTA negotiations. This is being done by strengthening dialogue activities at all levels and across all areas of mutual concern, as well as building the scope of tentative FTA negotiations between the two sides, the Vietnamese trade official noted.
Most notably, European businesses still want the EU to negotiate an FTA with ASEAN as opposed to bilateral FTAs between the EU and various ASEAN member states. Currently, the EU is conducting bilateral FTA negotiations with Indonesia and the Philippines.
The ASEAN - EU Business Summit represents an important annual event of the EU-ASEAN Business Council that aims to open a policy dialogue on issues that affect businesses and economies. This year’s conference is seeing the discussion of outstanding issues that ASEAN should primarily focus on promoting after the COVID-19 pandemic. Previous conferences have been held in Thailand, Indonesia, Vietnam, Cambodia, Malaysia, and the Philippines.
Over 100 businesses join in domestic tourism stimulus scheme
More than 100 tourism businesses have registered to develop their holiday packages as part of a domestic tourism stimulus programme, according to the Hanoi Department of Tourism on November 19.
The move will see a total of 85 travel firms, 21 hotels, shopping facilities, and 10 tourist sites join in the scheme, with the stimulus programme set to see the launch of more than 346 tours.
Most notably, the Hanoi People's Committee has also signed a co-operation agreement with three local airlines, namely Vietnam Airlines, VietJet Air, and Bamboo Airways, in an attempt to boost local tourism.
A range of tours have also been designed for tourists, including tours to Hoa Lo Prison, Hoang Thanh-Thang Long, the Trang An-Bai Dinh tourism site in Ninh Binh, Bat Trang ceramic village, and Duong Lam ancient village. In addition, a number of tours which links Hanoi with northern provinces and cities has also been launched.
Moreover, a diverse range of cultural and tourism activities are set to take place throughout Hanoi, including the Old Quarter, the Vietnam Museum of Ethnology, and Van Mieu-Quoc Tu Giam, also known as the Temple of Literature.
Just to the west of Hanoi, Ba Vi National Park will organise a hot air balloon fiesta and eco-tourism tours, enabling visitors to enjoy the beauty of local wild sunflowers and water lilies.
According to the Hanoi Department of Tourism, the capital aims to welcome 11 million domestic tourists in 2021, representing an increase of over 45% compared to this year.
Science park in Ho Chi Minh City to lure more talents
To create a highly interactive innovative urban city in the east of Ho Chi Minh City, it is necessary to have a science park as a place to lure more enterprises to the city.
At the workshop on “Science park – the innovation center for highly interactive innovation district in east Ho Chi Minh City”, Nguyen Anh Thi, director of Saigon Hi-Tech Park (SHTP) management board highlighted that the science park, which is planned for the long-term development of SHTP, will support innovative businesses to take shape and grow.
He stated the role of the science park as a multi-disciplinary centre for scientific and technological research, affiliated with regional universities. It will be a place to attract talents, domestic and foreign scientists, and enterprises to work, research and upgrade technologies.
Additionally, the science park is expected to facilitate high-tech research and development, technology application, and commercialisation activities.
Tran Thi Hong Lien, vice dean of the Faculty of Business Administration at University of Economics and Law stated that Ho Chi Minh City's startup ecosystem is just making its first steps towards globalisation, and to appeal to more startup talents worldwide it needs to create an attractive enough ecosystem.
She believed that the upcoming science park in Ho Chi Minh City could be a driving force, turning the city into a reputable startup hub.
"The science park should strike a balance between work and living. It is not only for a place for experts to settle down but for anyone to come and stay. SHTP should attract more universities or colleges to come to the park to create a land with plenty of universities. Also, the role of the government should gradually be reduced, making room for the private sector to sustain and develop the park," said Lien.
Thi said that the workshop is an opportunity for speakers to share case studies and experiences in building science parks in their countries like Singapore, South Korea, and Japan, helping Ho Chi Minh City find a suitable model for its science park.
In 2015, the city People’s Committee approved the project to construct the innovation centre for the highly interactive innovative district in the east of Ho Chi Minh City. It is anticipated that the technology park will be built in the 197.2-hectare Long Phuoc ward, District 9, Ho Chi Minh City in 2025.
According to a report of the high-tech park, there have been 49 foreign-invested enterprises with the total investment of $5.67 trillion. The park attracted $742.4 million of foreign direct investment in 2019, 3.5 times higher than the proposed plan.
E-commerce brands dominate YouGov Best Brands ranking in Vietnam
E-commerce brands shine in this year's annual YouGov Best Brands list on the healthiest brands in the nation.
The rankings are based on the index score from YouGov BrandIndex, which constantly measures overall brand health across eight specific sectors. The score takes into account consumers’ perception of a brand’s overall quality, value, impression, reputation, satisfaction, and whether consumers would recommend the brand to others.
Food brands also fare well in the list. Instant noodle brand Hao Hao ranked fourth (+38.4), while Omachi came in eighth (33.7) and snack food brand Kinh Do ninth (32.5). The top ten is rounded off with Japanese electronics manufacturer Panasonic, ranked fifth (38.2). Local e-commerce site Tiki.vn came in sixth (37.1), moving up four spots from last year. Southeast Asian e-commerce platform Shopee appears in the top ten for first time on rank seven (35.4), and digital device online retailer Dien May Xanh occupies the tenth spot (32.1).
Meanwhile, national carrier Vietnam Airlines remains on top of the list, holding its title as Vietnam’s healthiest brand in its second year running.
The YouGov BrandIndex also reveals brands that have noted the greatest improvements to their index score over the past 12 months in Vietnam. In the same vein as the top ten, e-commerce brands populate the improvers list. Shopee is this year’s most improved brand, with a +8.0 change in score. Globally, Shopee ranked eighth. Local e-commerce brands Concung and Tiki.vn came in seventh (up +4.2) and tenth (up +3.9), respectively.
Digital payment platforms have also risen the ranks this year. Momo ranked third (up +7.0), while ViettelPay made the fourth spot (up +6.8) and AirPay fifth (up +5.4).
Thue Quist Thomasen from YouGov Vietnam said, “While others may have struggled with the changing fortunes of 2020, one brand which has benefitted from consumers forced to stay at home is Shopee, indicating a shift for shopping from brick and mortar stores to online. Shopee is not only Vietnam’s most improved brand this year, it is also the eighth-healthiest brand in the world. Shopee is not an anomaly though, the prominence of local e-commerce sites like Tiki.vn, Dien May Xanh, and Concung in the rankings prove that 2020 has been the year for online shopping brands to shine.”
EU’s biggest beef exporter eyes Vietnamese market
Ireland, the largest beef-exporting country in the European Union (EU), is running a program to promote trade in Vietnam.
The European Commission and the Irish Food Board (Bord Bia) will introduce the beef and pork products of Ireland and the EU to Vietnamese customers through the “Love the taste, trust the quality” program.
The program will feature an online webinar on November 19 to introduce the farming, storage and processing steps of meat from the EU. Cooking recipes created by famous chefs will also be introduced at the event, Nguoi Lao Dong Online reported.
The EU meat industry is regulated to comply with the EU’s food safety regulations, which are considered the most stringent ones in the global market, according to Bord Bia.
The EU ensures that customers are supplied with high quality beef and pork and can trace the origin of the products. As such, EU’s meat manufacturing industry always dominates top positions in the world.
The EU is the world’s third biggest beef producer, with some 7.5 million tons each year. Ireland is the EU's largest beef exporter, with the value and volume reported at over 2.1 billion euros and 0.56 million tons in 2019.
At the World Steak Challenge 2019, Ireland won 75 medals, surpassing the United States, Australia, New Zealand and other countries in the European Union. The Irish Angus steak was also crowned the “World’s Best Fillet”.
In addition to beef export, in 2019, Ireland shipped 300,000 tons of pork worth one billion euros to many markets, including Vietnam. However, the country has yet to officially export beef to the Vietnamese market to date.
Binh Thuan to launch many events to attract tourists
The south-central province of Binh Thuan will organize a host of cultural, art and sports events during the last two months of the year to attract tourists to the coastal locality, given the sharp decline in tourist arrivals due to the Covid-19 pandemic.
According to the provincial Department of Culture, Sports and Tourism, eight major sports events which are set to take place include the Stop and Run Half Marathon Binh Thuan, the Mui Ne Dunes Marathon, the Futsal Binh Thuan Championship, beach sports and the Nam Ky Khoi Nghia bicycle race, in addition to many music shows.
Lately, the organizing board of the Mui Ne Dunes Marathon 2020, including the Thien Minh Group and the Victoria Phan Thiet Beach Resort, has also introduced the running event. It is scheduled to kick off on December 6 and is expected to gather 500 runners at home and abroad.
Binh Thuan is one of the most visited localities in the country but its tourism industry has been hit hard by the pandemic. Data from the provincial Department of Culture, Sports and Tourism revealed that the province’s tourism revenue over the past nine months tumbled nearly 46% against the same period a year ago at over VND6 trillion.
As of this September, the impact of the pandemic forced 40% of travel businesses in the province to shut down. The average occupancy rate of residence facilities was some 10-15% and some 60% of hotels and resorts had to suspend operations.
Binh Duong petitions gov’t to fund social house construction
The People’s Committee in the Southern Province of Binh Duong has petitioned the government to fund social house construction at a meeting with a mission team from the Vietnam Bank for Social Policies on the project to give loans to social house developers and buyers.
According to reports, the branch of the Vietnam Bank for Social Policies in Binh Duong has signed credit agreements and disbursed VND42 billion (US$1,7 million) to 101 customers.
In the meantime, the provincial fund for house development has provided VND73 billion in loan to the developer of a social house project.
The People’s Committee petitioned the government to continue providing capital for developers of social houses and buyers as well as expand the loan term to 20 years and help buyers and renters to access to capital.
Additionally, Binh Duong authority has also petitioned to amend some regulations on development and management of social houses as per the government decree No. 100.
HCMC to hold Promotion Month 2020, offering discount up to 100%
HCMC People’s Committee has permitted the Department of Industry and Trade to organize Promotion Month 2020 with the aim at assisting businesses to sell their goods and boost trading in the end months of the year, as well as implementing the campaign 'Vietnamese people give priority to consuming Vietnamese goods.'
The sales campaign will go on from November 22 to December 12, 2020, over the same period as Black Friday in some countries, in response to Vietnam’s Online Friday on December 4.
This campaign called “Golden season sales” aims to promote goods consumption at year end, especially domestic goods. The maximum discount rate is up to 100% in line with the Government’s Decree on Trade Promotion dated May 22, 2018.
There will also be tourism development forums, where companies can promote their products in Hanoi, HCMC and some Central provinces, in association with this campaign.
Covid-19 accelerates digital transformation process of Vietnam banking sector
Many banks are on the brink of losing their market shares in case they lag behind in the digitalization process.
While Covid-19 is causing severe impacts on the economy as a whole, the pandemic has also served as a driving factor for banks and fintech companies in Vietnam to digitalize their services and take on online payment.
Pham Tien Dung, director of the Payment Department under the State Bank of Vietnam (SBV), said recently, there has been a major shift of customers from one bank to another, leaving many on the brink of losing their market shares in case they lag behind in the digitalization process.
According to Mr. Dung, in order to promote digital economy, banks should find the quickest way to attract customers to use their online services. And secondly, they have to be satisfied with the service quality offered.
In Vietnam, the growth rate of mobile banking is estimated at 200% in recent months, while around 30 million people are using banks' payment system daily. However, customer behavior remains the largest restriction to promote greater usage of online banking services. In this regard, around 81% of credit institutions are working with fintech companies to develop new services.
Nguyen Chien Thang, director of BDIV Digital Bank, said before 2010, as customers look to move from cash-based to e-payment with the introduction of debit cards and ATMs, BIDV took advantage of this trend to become Vietnam’s top three banks with the largest number of transaction points. During the Covid-19 pandemic, BIDV recorded 15.5 million transactions per month with an amount of VND11 trillion (US$475.43 million).
Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said priorities for the economy in the post-Covid-19 period is digitalization, corporate operation, and the development of e-commerce.
Digital transformation is fast becoming an urgent task to help support the development of enterprises at the moment, Mr. Loc noted.
Among Southeast Asian economies, Vietnam holds a number of advantages in developing digital economy. Statistics revealed the country is home to 70 credit institutions, not to mention intermediary payment services providers.
In the first six months of 2020, the amount of transaction value via the internet is estimated at VND7,000 trillion (US$302.49 billion) and nearly VND300 trillion (US$12.96 billion) via mobile phones, which remain disproportionate to the potential of the economy, stated Mr. Loc.
To address the technological bottlenecks, Mr. Thang from BIDV said in the bank’s development strategy until 2025 with vision to 2030, it identifies technology and digital banking among the top three pillars for development.
Mr. Dung from the SBV expected the government to continue investing in the digital infrastructure, including technology for the banking sector. Moreover, there should be greater connectivity between banking infrastructure and those of other sectors to expand the digital ecosystem.
In addition to the development of digital banking, Mr. Dung said financial inclusion should be among priorities, and banks should continue to provide services in remote and rural areas as part of the national strategy for financial inclusion.
Vietnam cultural tourism targets US$8-billion annual revenue by 2030
The draft national plan on cultural tourism will focus on the development of two key areas which are cuisine and heritage.
Vietnam aims to bring revenue of the cultural tourism industry to represent 20% of the projected US$40 billion annual revenue of the whole tourism industry by 2030, according to the national branding project on cultural tourism being drafted by the Vietnam National Administration of Tourism (VNAT).
The national brand for Vietnamese cultural tourism will also be promoted and recognized in new and target markets
According to the VNAT, the project is part of the strategy on the development of Vietnam's cultural industries until 2020, with a vision until 2030 approved by the prime minister.
The building of a national brand for cultural tourism is necessary to create a breakthrough in the development of tourism products, helping to achieve the objective of turning tourism into a spearhead economic sector.
The project is being developed by the VNAT Tourism Market Department with a focus on two key areas namely gastronomy and heritage, and creating a network of typical tourist destinations and products with high quality and acceptance by the market.
For the cultural tourism brand development, the VNAT would enhance promotion; support the development of heritage and culinary tourism products and improve policies to encourage heritage and culinary tourism.
The draft also outlines solutions to implement cultural tourism including research and forecasting, science and technology, commercial and communication, investment, applied finance.
Vietnam predicted to have 138,000 new enterprises in 2020
The number of newly established enterprises in 2020 would be around the figure recorded a year ago.
In case the global Covid-19 situation is under control and the Vietnamese government continues with effective support measures for enterprises, the number of newly established ones in this year could be over 138,000, around the same number in 2019, according to Bui Anh Tuan, head of the Business Registration Department under the Ministry of Planning and Investment (MPI).
This would be considered a major achievement for the economy, given the fact that 111,160 new businesses have been created in the first 10 months of 2020 with a combined registered capital of VND1,594 trillion (US$68.8 billion), down 2.9% in number but up 11.1% in registered capital year-on-year.
“There have been improvements in the growth rate of newly established enterprises over the years,” noted Mr. Tuan.
While in the first four months of 2020, business creation suffered a contraction of 13.2% year-on-year, the rate later narrowed to 5.1% in seven-month period and 3.2% in the January – September period.
Overall, the situation of new business formation in the country has improved thanks to effective support policies and the containment of the Covid-19 pandemic.
Since the outbreak of the Covid-19 pandemic, the Vietnamese government has been implementing a wide range of support for the business community, with the latest move being a cut of 30% in corporate income tax for enterprises having their revenue of less than VND200 billion (US$8.61 million) in 2020.
Additionally, other supporting programs consist of a credit package worth VND300 trillion (US$12.87 billion), including a VND180-trillion (US$7.63 billion) fiscal stimulus package in forms of delay of payment of value-added tax, corporate income tax, and a financial support package for vulnerable people worth VND62 trillion (US$2.7 billion).
Hanoi – Impressive destination for real estate investors
Hanoi has its own attractions that become special to outsiders.
Executives of global real estate services provider Savills have opined that Hanoi has appeared to become a key part of Vietnam’s growth story as the city has “its own attractions” in the real estate sector.
Hanoi, with more than 1,000 years of history, is Vietnam’s cultural center as well as its administrative hub.
The French colonial era left Hanoi with a number of historic buildings and tree-lined boulevards that have garnered it the title of the Paris of the East. The population of 8.1 million doubles if the nine surrounding provinces are taken into account.
In addition, Hanoi benefits from Vietnam’s thriving economy: 2019 GDP growth was 7.02%, above the 2019 government target of 6.6% to 6.8%. Retail sales were US$163 billion, up 13% on year.
Troy Griffiths, deputy managing director of Savills Vietnam, said “Hanoi offers a wealthy population by Vietnamese standards and that population is growing rapidly. The city’s infrastructure is rapidly evolving, with metro lines, roads and bridges which will improve connectivity and boost real estate values.”
Meanwhile, the city’s stock of modern real estate is growing and domestic developers are maturing to deliver international grade assets, Griffiths adds.
Last year, Japan’s Sumitomo Corporation joined forces with Vietnam’s BRG Group to develop a 272-ha smart city in Dong Anh district, north of the city's center. The extension of Metro Line 2 from central Hanoi to Noi Bai International Airport will pass through the project site, which will be home to a new station.
Other foreign developers and investors active in Hanoi include Keppel Land, CapitaLand, Mitsubishi Estate, Gaw Capital Partners and Hongkong Land.
The city’s growing population fuels demand for residential property. Apartment sales rose 26% to nearly 40,000 in 2019, with new supply of 37,700 units. Supply looks steady, with 124,000 units to be delivered over the next three years. Prices are around 30% lower than in Ho Chi Minh City. Supply of new villas and townhouses was limited last year but more is expected over the next two years.
Hanoi’s retail stock grew 14% to 1.6 million square meters (sq.m) in 2019 and rents fell 1% over the year, despite almost full occupancy in all retail types. The office sector grew by 10% to 1.8 million sq.m and average rents rose 5% in 2019. Vacancy in B and C grade offices is almost zero. A total of eight projects, comprising 169,000 sq.m will be completed this year.
The city has 9,800 rooms in 65 hotels, with a further 1,200 to be delivered this year, while 48 projects with 9,100 rooms are in the pipeline.
Hanoi is Vietnam’s most popular tourist destination and the 15th most visited city in Asia Pacific, according to research by Mastercard.
Covid-19 puts Vietnam under pressure for digital transformation: VCCI
Further support is needed from policymakers to provide both legal and infrastructure means to boost e-payment in Vietnam.
Given significant Covid-19 impacts on socio-economic life, the pandemic is putting huge pressure on Vietnamese enterprises to take on and speed up the digital transformation process, according to Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc.
While the Covid-19 pandemic continues to persist with uncertainties, enterprises have no other choice than to speed up the changes and seek a more sustainable business model during the context of the pandemic, stated Mr. Loc at a forum discussing measure to boost non-cash payment among enterprises held recently in Hanoi.
In late 2016, Prime Minister Nguyen Xuan Phuc approved a project aimed at promoting non-cash payment in Vietnam during the 2016 – 2020 period. Four years on, there have been improvements in non-cash payment activities in Vietnam, including significant upgrade in payment technologies and greater stability in the inter-banking e-payment system to meet growing demand of customers.
The majority of e-payment methods are growing strongly in Vietnam, especially mobile banking with a growth rate of 200% in recent months. Statistics revealed the country is home to 70 credit institutions, not to mention intermediary payment services providers.
In the first six months of 2020, the amount of transaction value via the internet is estimated at VND7,000 trillion (US$302.49 billion) and nearly VND300 trillion (US$12.96 billion) via mobile phones, which remain disproportionate to the potential of the economy, stated Mr. Loc.
The value of transaction via inter-banking e-payment services in the first three months of 2020 expanded by 21% year-on-year.
Despite such improvements, Vietnam still records a high ratio of people using cash in transaction. Data from International Data Group (IDG) revealed that in 2019, nearly 40% of the Vietnamese population had bank accounts, but over 80% still used cash for their daily transaction.
From enterprises’ perspective, while non-cash transaction has become an inevitable trend, e-payment has not received the attention it deserves, stated Mr. Loc.
Further government support needed
According to Mr. Loc, the infrastructure system for e-payment in Vietnam remains inefficient, while financial institutions, including banks and intermediary payment services providers, have their own payment systems and points of sales, causing confusion among customers and waste of resources.
Moreover, new payment methods such as QR code or biometrics payment have emerged but are not fully assessed by local authorities for wider application.
Another major issue that Mr. Loc pointed out is the imperfect legal framework for digital payment, in turn limiting the expansion of such methods among the business community.
Mr. Loc urged further support is needed from policymakers to provide both legal and infrastructure means to boost e-payment in Vietnam in general, and that of among the business community, in particular.
Central economic region re-starts post-pandemic tourism recovery plan
Ha Noi, HCMC, and five central localities will jointly host a forum on November 27-28 in an effort to restart domestic tourism activities as the COVID-19 outbreak has been put under control.
Under the theme “the flow of quintessence,” the event will help boost tourism linkages between central economic region (comprising one city and four provinces, namely Binh Dinh, Da Nang, Quang Nam, Quang Ngai, and Thua Thien-Hue) with the country’s two largest cities.
Tourism associations of the seven cities and provinces are expected to sign cooperative deals with airlines and travel agents.
On the occasion, an online forum will also be held to collect comments and initiatives for tourism development. A“business matching” will offer a playing field for travel agents to advertise products.
The central coastal region stretching from Thanh Hoa to Binh Thuan includes 14 cities and provinces.
With a coastline of 1,900km, the region holds a lot of advantages for marine economic development.
It is home to nine airports, including five international ones, 14 seaports, and 11 of the 17 nationwide coastal economic zones.
The sea in the central region holds a particularly important position in the development of the marine economy./.
ASEAN, EU should boost economic, trade cooperation: Minister
Minister of Industry and Trade Tran Tuan Anh proposed ASEAN and the EU beef up economic and trade cooperation at both bilateral and regional levels, with a focus on urgent issues such as supply chains and non-tariff barriers, while addressing the eighth ASEAN-EU Business Summit held online on November 19.
Anh said the EU was ASEAN’s second-largest trading partner during 2009-2018 and its largest investor.
The EU-Vietnam Free Trade Agreement (EVFTA) has had positive effects on Vietnam’s economy, helping improve the country’s governance and legal framework.
The initial successes of the high-quality FTAs the EU has signed with ASEAN member states will form a foundation for an FTA between the two blocs, in the context of both sides discussing the resumption of talks over an agreement, he added.
Delegates exchanged ideas on how to boost digital transformation and digital economic development and have a sustainable health care system at an appropriate cost given COVID-19.
They also discussed opportunities for European businesses during ASEAN’s post-pandemic economic recovery.
Singaporean Minister for Trade and Industry Chan Chun Sing reaffirmed that the EU and ASEAN can be connected by digital platforms and standards instead of divided by geographical distance.
A Digital Economy Agreement would be an important step towards digital connectivity between the two blocs, he said./.